How to Write a Vermont Promissory Note

A Vermont promissory note must first have the proper title. This is very important for secured Vermont promissory notes. If the word “secured” isn’t in the title, a legal disagreement may result in a court treating the contract as unsecured. After the title, information about the parties and the loan is used to outline the agreement between the parties:

• The date the Vermont promissory note was written. This date is placed below the title. The most common format for this date is month, day, and year. This date is used to prove when the parties entered into the agreement. The date of the borrower’s signature also helps prove the validity of the agreement. The date of creation and the date of the signature also help create important legal deadlines for certain actions.
• Name each party and list their role. Use the legal name of each individual or entity entering into the promissory note. List their roles as well. If there is a co-signer, their name and role should also be included.
• The mailing address for each party. Don’t forget to include the city or town, state, and zip code for each address. If the promissory note is secured, list the physical address for the borrower (and co-signer) if that address is different from the mailing address.
• The principal amount of the loan. This is the amount of the loan provided without including the interest charged. Because a Vermont promissory note is a legal contract, ensure that this number is accurate before the document is executed.
• The interest rate charged per year. This is the amount of interest charged on the loan. It is a yearly rate and is usually called the per annum or annual percentage rate (APR). The maximum interest rate in Vermont is 12%.
• Payment agreement. This is how the borrower will repay the loan. This section lists the total number of payments that must be provided, the amount of each payment, and the due date for each payment. If the lender charges a late fee, the amount of the fee should be documented as well as when it is tacked onto the account. If the lender has a mailing address specifically for payments, it should be listed in this section.

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If the Vermont promissory note is secured, including an accurate description of the collateral can be important. Failure to list this description may result in the court holding the agreement as unsecured.

Following the main body of the Vermont promissory note, terms and conditions are created by the use of clauses. There are many clauses a lender may use to write a promissory note that protects their interests. The most commonly used clauses are:

The Vermont Secured Promissory Note Template is a .PDF/Word document that can be used to quickly create a secured promissory note. Once completed, the form will outline the required terms of a loan (such as the interest rate, principal sum, payment schedule, etc.). It should be noted that one of the main requirements of a “secured” note is the pledging of collateral from the borrower. Once the form has been completely filled out, it must be signed by the borrower/lender (and witnesses) in order to be permissible in court.

The Vermont promissory note templates are available for download via the links posted on this page. The templates can be used to draft secured or unsecured promissory notes. The difference between the two types of notes is that if a note is “secured,” it must have the backing of collateral (pledged from the borrower). Promissory notes are essentially an outline of a loan agreement, they contain the principal sum of the loan, interest rate, payment schedule/amount, and other terms.

DOWNLOAD this Vermont Promissory Note Form in order to document a lending agreement between two parties in Vermont.  The form allows the parties to determine whether or not the money lent will be secured by property or collateral.  It also allows the parties to contract for the length of the loan and whether the loan will be paid in equal paymnets or in one large payment at the end of the loan term.  In addition, within the parameters of Vermont law, the parties can decide what interest rate will be charged for the borrowing of funds.